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In the hardenability concept described in the previous section, alloying elements have a profound effect on depth of hardness. Alloying elements also change the characteristics of the iron–carbon diagram. For example, in the iron–carbon diagram (see Fig. 1) austenite cannot exist below the eutectoid temperature of 727 C. However, there are steels where austenite is the stable phase at room temperature, e.g., austenitic stainless steels and austenitic manganese steels. This can only be achieved through alloying. There are, however, special conditions where small amounts of austenite can be retained at room temperature during rapid quenching of low-alloy steel. When this occurs, the austenite is too rich in alloying elements to transform at room temperature and is thus retained as small regions in a martensitic microstructure. Because of this, it is called retained austenite. The retained austenite can be transformed through tempering the steel.

In austenitic stainless steels, when nickel is added with chromium, the austenite phase field is expanded, allowing austenite to be stable at room temperature. The popular SAE/ AISI 304 austenitic stainless steel contains 18% Cr and 8% Ni. Austenitic manganese steel (Hadfield steel) contains 12% Mn with 1% C. The Mn and C allow austenite to be stable at room temperature. Because of this ability, nickel and manganese are, therefore, called austenite stabilizers. Other elements are ferrite stabilizers, e.g., chromium, silicon, and molybdenum. A ferrite-stabilizing element expands the ferrite phase field, and the austenite phase field is restricted within what is called a gamma loop (gamma, , is the symbol for austenite).

A gamma loop can be seen in the iron–chromium equilibrium diagram in Fig. 11. The gamma loop is shown at the left side of the diagram. According to this diagram, iron–chromium alloys with 12.7% Cr or higher, the transformation from austenite ( ) to ferrite ( ) does not occur and ferrite exists from room temperature to melting. Iron–chromium alloys make up an important class of stainless steels called ferritic and martensitic stainless steels.